You go to the BMV to update your driver’s license or renew your registration. You pay with a credit card and you get slapped with an extra fee for the convenience of paying with plastic.
It’s something that has been around for a long time, but with paying with plastic more of the preferred method of payment by Hoosiers nowadays, one state lawmaker says it’s time to get rid of those fees.
State Sen. Fady Qaddoura (D-Indianapolis) plans to bring forth legislation in the upcoming session that would eliminate credit card convenience fees that you pay when you pay for government services.
“If taxpayers fund government services in the first place, why do they have to be double-charged to fund the services that they funded in the first place using their tax dollars?” Qaddoura said to WISH-TV.
He pulled state data that shows when you use a credit card to pay for something, like everywhere else, you pay a fee for doing that. If you pay cash, you don’t pay that fee. But, he said that data shows instead of absorbing the cost of using credit cards for transactions at places like the BMV, the state is passing those costs onto taxpayers.
“From a policy perspective it’s the right thing,” Qaddoura said of his bill. “From a fiscal perspective, it is a reduction of burden on our taxpayers who are already funding government services.”
If the bill becomes law, credit card companies would still charge a fee every time Hoosiers use a credit card to pay for government services. The difference would be that the state would end up paying that fee with taxpayer money rather than charging a person at the time of the transaction.
Also, if passed, the bill would not take immediate effect. The state and credit card companies operate through contracts and most of those current contracts do not expire until 2027. At the BM, for example, the elimination of credit card fees would save Hoosiers roughly 5-to-7 dollars per transaction.
10 comments
Zero sum gain. If the state (that is the tax payer) pays the transaction fee, in all likleyhood, the state will increase the sales taxes in order to meet the fiscal responsibility. That means that instead of a pay as you go transaction (the current situation) there will likely be an increased tax rate for all purchases.
Who the heck dreams up these schemes?
Probably the same people who want a vote because I got you free stuff.
The fee is what the credit card company and processors charge the business for the “privilege” of serving there card holders. I shouldn’t have to pay for that use a check or cash.
Yes, they will just raise prices and hide those fees, calling them something else!
Credit card fees are out of control. Most businesses absorb them now and don’t pass them onto the consumer. Think Amazon, etc. There is no reason state government can’t do the same. They would find folks would be more likely to pay, less likely to default on a payment, with more revenue brought in.
Do you really believe that “businesses absorb them…and don’t pass them onto the consumer.”? It is part of the cost of doing business and is just one of the many factors considered when setting prices. Accepting credit cards has proven to be highly beneficial to businesses, paying the fees is worth that benefit to them, and the higher prices, as stated, are simply one of the many costs of doing business.
Make it cover payments to municipal entities as well. City of Mishawaka Utilities charges outrageous fees for card transactions. I paid a almost
$9.00 “convenience” fee to pay a $275.00 utility bill in November for using my debit card. I’ll pay cash in person from now on..
I assume that you pay your bill online. Is it worth the “outrageous” fee of $9 to have to go there in person, take up your time, use up your gas, just to save less than ten bucks? Why should the city have to pay the fee that saves you the time and the trouble? I have a Rewards card that pays me back a good chunk of what I pay in fees; it is worth the extra charge to me.
They made 26 million selling our personal information. They have made enough money, they can cover the fee to use a card!
How much does it cost business and government to count, store and take bills (and maybe coins) to the bank? Is the convenience for the customer or the business?
The State of Indiana can’t absorb the CC fees because they very unwisely destroyed the Rainy Day Fund by over expanding Medicaid. The state government is in a state of economic malfeasance. If a citizen does not want to pay the CC fee then uses cash or check. Frankly when I renew my vehicle plates online it is worth the 3% not to have to go waste half a day standing in line. These fees for service should be eliminated because Citizens pay through the nose for the government in the first place.